US unveils new rules to curb tax inversions

Discussion in 'Shire' started by Anonymous, Sep 23, 2014 at 3:10 PM.

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  1. Anonymous

    Anonymous Guest

    US unveils new rules to curb tax inversions
    The US Treasury Department announced Monday that it is taking steps under five sections of the country's tax code to make inversions harder and less profitable to accomplish on deals finalised as of September 22. According to the department, the moves "will significantly diminish the ability of inverted companies to escape US taxation," adding that "inversions [will also] no longer make economic sense" to those companies considering mergers.

    Specifically, the actions include blocking inverted companies from using so-called "hopscotch" loans to access a foreign subsidiary's earnings without paying US tax on it. Another move seeks to prevent US companies from restructuring their foreign units as a way to access overseas cash reserves tax-free, while yet another aims to close a loophole that currently allows them to transfer cash or property from a "controlled foreign corporation" to the new parent in order to avoid paying US tax.

    "This action will significantly diminish the ability of inverted companies to escape US taxation," Treasury Secretary Jacob J. Lew said. "For some companies considering deals, today's action will mean that inversions no longer make economic sense," he added.

    Meanwhile, the Treasury Department said it will also make it more difficult for companies to invert by strengthening the requirement that the former owners of the US entity own less than 80 percent of the new combined company. Further, the department pledged to continue looking for other regulatory steps to reduce the benefits of inversions, as well as reviewing tax treaties and other international commitments.

    In the wake of Pfizer's unsuccessful attempt to invert by acquiring UK-based AstraZeneca earlier this year, Lew asked Congress to approve tax changes retroactive to May in a bid to stop inversion deals. Last week, Horizon Pharma completed its acquisition of Vidara Therapeutics, which includes moving its corporate address to Ireland, while pending inversion deals include AbbVie's acquisition of Irish-based Shire, as well as a transaction between Mylan and Abbott under which Mylan will relocate to the Netherlands.
     

  2. Anonymous

    Anonymous Guest

    Yahzee
     
  3. Anonymous

    Anonymous Guest

    and you repost this why? is abbvie going to pay 500 million or whatever the termination of the deal cost was written into the contract after already agreeing to pay a very inflated price for Shire. NO

    they will complete deal and if they get stopped from benefitting from the tax inversion by the government, they will layoff more to offset the difference. thanks for reposting the internet article that everyone has probably already seen.
     
  4. Anonymous

    Anonymous Guest

    Its 1.6, not 500 million. FYI and I think yes they pay it because in the long run it saves them so much more.
     
  5. Anonymous

    Anonymous Guest

    Kathy...

    Thanks for clearing this up!
     
  6. Anonymous

    Anonymous Guest

    fyi.....to be exact it is 1.6 billion, or reimburse not less than 500 million. fyi
     
  7. Anonymous

    Anonymous Guest

    They're going to move forward with the deal because they needs your compounds. They'll use the inflated cost as a tax write off.
     
  8. Anonymous

    Anonymous Guest

    The layoffs will just be more steep